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Orbital ATK (OA) Beats Q1 Earnings and Revenue Estimates

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Orbital ATK, Inc. posted first-quarter 2018 adjusted earnings of $1.76 per share, which beat the Zacks Consensus Estimate of $1.50 by 17.3%. Earnings improved 43.1% year over year from $1.23.

In the first quarter of 2018, reported GAAP earnings excluding onetime items were $1.74 per share, up 51.3% year over year from $1.15.

Total Revenues

Orbital ATK's total revenues were $1,312 million, surpassing the Zacks Consensus Estimate of $1,134 million by 15.69%. Revenues were up 20.9% from the year-ago quarter’s $1,085 million, courtesy of increased sales volume in all three segments.

Orbital ATK, Inc. Price, Consensus and EPS Surprise

 

Segmental Update

Flight Systems Group: Revenues in the segment rose 30% year over year to $482 million on the back of higher activity in Aerospace Structures Division, driven by major aircraft program ramp-ups.

Defense Systems Group: Revenues in the segment totaled $559 million, up 24% year over year on higher activity in Defense Electronics Systems, Armament Systems and Small Caliber Systems Divisions.

Space Systems Group: Revenues in the segment were $316 million, up 5% year over year owing to higher activity on Satellite Systems Division contracts.

Highlights of the Release

Research and development expenses in the first quarter totaled $100 million. Consistent investment in research enabled the company to upgrade existing products and develop new ones.

Orbital ATK paid nearly $18 million dividend to shareholders in the first quarter. The company discontinued its share repurchase program due to the ongoing acquisition deal with Northrop Grumman (NOC - Free Report) .

In the first quarter, Orbital ATK's firm contract backlog increased to approximately $9.4 billion as of Apr 1, as it received new firm and option orders. Total backlog was approximately $16.6 billion, up 12%.

Total adjusted operating income improved 21.9% to $154.9 million from $127.1 million in the year-ago quarter.

Financial Highlights

Net cash from operating activities was $237 million and adjusted free cash flow was $304.3 million in the first quarter.

Capital expenditure was $71.3 million in the first quarter, up from $42.7 million in the year-ago quarter.

Zacks Rank

Orbital ATK carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Defense Releases

The Boeing Company (BA - Free Report) reported adjusted earnings of $3.64 per share in first-quarter 2018, beating the Zacks Consensus Estimate of $2.59 by 40.5%.

Lockheed Martin Corp. (LMT - Free Report) reported first-quarter 2018 earnings of $4.02 per share from continuing operations which surpassed the Zacks Consensus Estimate of $3.35 by 20%.

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